Tenaris to build $1.5bn pipe plant in South Texas

The facility is expected to produce 600,000 tpy of casing and tubes used in drilling as well as pipe used to move oil and gas. The company said Friday it would break ground on the facility in 2014 and complete it in 2016. It is expected to generate 600 manufacturing jobs with an average salary of $66,000 a year.

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By ANGEL GONZALEZ

BAY CITY, Texas -- Tenaris plans to build a $1.5 billion
facility to make seamless pipe, a new sign of rural Texas's
rising fortunes in the wake of the oil boom unleashed by
fracking.

The facility is expected to produce 600,000 tpy of casing
and tubes used in drilling as well as pipe used to move oil and
gas. The company said Friday it would break ground on the
facility in 2014 and complete it in 2016.

It is expected to generate 600 manufacturing jobs with an
average salary of $66,000 a year.

Tenaris's move underscores the increasing activity in the
Texas oil patch, where advances in drilling techniques such as
hydraulic fracturing have spurred a production boom in areas
such as the Eagle Ford shale, one of the world's
fastest-growing oil fields.

Texas Gov. Rick Perry, who announced the project at an event here, told
journalists the state is talking with "a substantial number of
entities" interested in setting up other energy investments.
But he added the scale of this project "is a bit
extraordinary."

The Texas Enterprise Fund, a state economic-development
agency, is contributing $6 million to the project.

German Cura, Tenaris's president for North America, said
this is the company's first major investment in the US since
2006-2007, when it bought two companies here. The move
underscores Tenaris's belief in America's industrial
renaissance as a consequence of the energy boom, he said.

"There is a structural transformation in the world's energy
picture," Mr. Cura told The Wall Street Journal. "The US is
absolutely less dependent than it has been" on foreign energy,
he said.

Bay City was chosen as the site of the pipe-making plant
because of its proximity to deepwater ports in the US Gulf of
Mexico and oilfields such as the Eagle Ford Shale, as well as
there being plenty of land for expansion, Mr. Cura said.

Bay City is about 80 miles south of Houston and is the seat
of Matagorda County, near the bay of the same name. About
37,000 people live in Matagorda County, and its economy relies
on rice farming, fishing and energy.

Dow Jones Newswires

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